Trustee Tax Rate Increasing to 39%

It is proposed that the trustee tax rate will increase from 33% to 39%. This change was initially indicated back in the May 2023 budget, but it is yet to become law. Recently we have had strong indications from both the IRD and the finance minister, Nicola Willis, that this rate increase will go

2024-02-22T15:47:13+12:00February 22nd, 2024|Tax|

Tax Planning Helps You Do More With Your Money

Tax planning is a strategic approach to managing your business’ financial affairs, with the aim of legally minimising your tax liability. In other words, you plan ahead to make sure you pay the taxes you should be paying, but not a penny more. Working with your tax adviser, you can look for deductions,

2024-02-18T12:04:28+12:00February 18th, 2024|Tax|

Fringe Benefit Tax Basics

As an employer, if you provide fringe benefits to employees, or others associated with your business, you must generally pay fringe benefit tax (FBT) on the value of these benefits. So, when are you liable for FBT? Any time you provide non-cash benefits to your staff. The list is potentially endless but in practice, most

2022-08-29T11:17:38+12:00August 29th, 2022|Tax|

IRD Says “No More Mr Nice Guy”

Due to the COVID pandemic, the Inland Revenue Department (IRD) has been taking a much more relaxed approach to outstanding tax debt – but now IRD is ready to crack down. Since the start of July, the IRD have stepped up their efforts to pursue outstanding amounts from taxpayers who owe tax. PAYE and KiwiSaver

2022-08-29T11:19:25+12:00August 24th, 2022|Tax|

Tax Account Types

When you make a payment to IRD you will need your IRD number as a reference. Make sure you choose the right account type when making payments, as mis-coding your payment could result in IRD refunding the payment or missing future tax payments which may cause penalties to be charged by IRD. GST and Provisional

2022-07-25T15:55:50+12:00July 25th, 2022|Tax|

Overseas Income And Tax

If you receive income from overseas sources, sometimes working out the tax can be tricky. Here are twelve points to consider. #1 Declare rental income from overseas properties. You can claim deductions for rental-related expenses, and you may also be able to claim a credit for tax paid in the other country on that income.

2022-08-29T11:21:04+12:00July 20th, 2022|International Tax, Tax|

IRD To Clamp Down On Top Tax Rate Avoidance

Do you earn more than $180,000 in taxable income? Inland Revenue is proposing changes that will make it much tougher to avoid paying the full 39% top tax rate. In 2021, Inland Revenue increased the top tax rate to 39%. That rate is higher than both the 28% tax rate for companies and the 33%

2022-06-01T11:53:03+12:00June 1st, 2022|Tax|

Tax Changes That Could Impact You Or Your Business

With over 100 tax changes that came into effect in April, there’s sure to be something that will have an impact on you or your business. Take a look at our summary of the 13 most influential areas of change. Matariki is now a public holiday for tax purposes. GST is being tweaked for: groups;

2022-06-01T10:46:02+12:00June 1st, 2022|Tax|

Resident Withholding Income & Tax

If you earn income from interest or dividends, or if you pay business interest to investors, it’s a good idea to understand how Resident Withholding Income and Tax (RWT) affects you. Resident withholding income includes interest and dividends. Generally, resident withholding tax (RWT) must be paid on it. If you are a New Zealand tax

2022-02-15T15:04:02+12:00February 15th, 2022|Tax|

Christmas Business Expenses

Although this year many businesses are having to do their end of year celebrations differently, this is still the time of year when you usually spend more than usual on staff and client entertainment. Inland Revenue provides specific rules regarding different types of entertainment expenses. Here are some rules regarding Christmas business expenses that are

2021-12-10T08:50:23+12:00December 10th, 2021|Accounting, Tax|

How To Structure Loans

When approaching a bank or other intermediary for the purpose of borrowing funds, they may advise a structure that is easy for them and meets their internal requirements. This is not necessarily, and often times is exactly the opposite of, our recommended advice on how to structure loans in order to maximise tax deductions and

2021-08-02T10:00:52+12:00June 15th, 2021|Tax|

PIE Income And Prescribed Investor Rate

From the 2021 year onwards, any PIE income and the tax deducted at your Prescribed Investor Rate (PIR) will need to be disclosed in your end of year tax return so IRD can determine whether an adjustment needs to be made for any incorrect PIE tax deductions. Tax at the PIR is no longer treated

2021-06-02T09:13:21+12:00June 2nd, 2021|Tax|

Tax Debts Under $10,000

Businesses with tax debts under $10,000 should note that the IRD will be taking action soon. The IRD will begin contacting taxpayers with outstanding tax arrears under $10,000 from 1st June 2021 if: The debt is more than 60 days overdue, and The amount of the debt is between $200 and $10,000, and The debt

2021-05-24T10:24:03+12:00May 24th, 2021|Tax|

What Business Expenses Can You Claim?

Q. What’s the big deal about business expenses? A. Put simply, business expenses can help to lower your tax bill. Many business expenses can be claimed to offset your business income, reducing the amount of tax you need to pay. So it’s in your interest to know what expenses you can claim. Q. Who can

2021-05-21T10:41:10+12:00May 21st, 2021|Accounting, Tax|

Claiming Donations

If you have made any donations of $5 or more during the financial year, you may be able to claim these as tax credits. For claiming donations as tax credits: The charity or organisation you donated to must be an approved donee as per the IRD’s ‘Approved Donee Organisations’ list ; The donation must not

2021-04-15T11:04:28+12:00April 15th, 2021|Tax|

Tax Discounts In First Year Of Business

Any self-employed individuals such as sole traders, contractors and partners of partnerships, who are in their first year of operating could be eligible for tax discounts by paying their income tax early. In the first year of trading, sole traders, contractors and partners usually do not need to pay their Terminal Tax (year-end tax) for

2021-02-05T08:34:57+12:00February 5th, 2021|Tax|

Deducting Low-Value Assets On Rental Properties (Case Study)

Are you confused about the rules regarding deducting low-value assets on rental properties? Let’s take a look at the scenario where rental property owners have made improvements to the property with low-value asset purchases. They have added insulation in the ceiling and installed an extractor fan in the external wall of the bathroom. The government

2020-11-02T11:49:06+12:00November 2nd, 2020|Property Accounting, Tax|

Is The Accounting Income Method Right For Your Business?

UHY Haines Norton Manager Paul Eckford explains why the Accounting Income Method for provisional tax could be a good option for small businesses struggling with managing cash flow. Provisional tax can be a real burden on cash flow. Normally due in 3 instalments during the year, most small businesses must budget for these payments which

2020-09-23T14:35:21+12:00September 23rd, 2020|Accounting, Tax|

Claiming Business Expenses

Claiming business expenses against your income is a great way to save you money by lowering your tax bill. The number one rule about claiming business deductions is that the expense must be incurred in deriving or earning business income. That's why there isn't a definitive list of claimable business expenses because there must be

2021-07-19T16:30:49+12:00April 28th, 2020|Accounting, Tax|

Common GST Mistakes

Many of our clients prepare and file their GST returns and payments for their small businesses. As is the case with all taxes, it’s important to calculate your GST correctly - getting it wrong can prove to be an expensive exercise! Here we share some GST mistakes we commonly come across: Not registering for GST

2020-02-26T09:21:30+12:00February 26th, 2020|Tax|

Resident Withholding Tax

We explain what resident withholding tax is, who it applies to, rates and rules for making payments. What Is Resident Withholding Tax? Resident withholding tax (RWT) is: The initial tax you pay on interest and dividends you earn from your New Zealand bank accounts and investments; Whereas the initial tax you pay on income from

2021-07-12T13:10:30+12:00September 30th, 2019|Tax|

Which Client Entertainment Expenses Are Tax Deductible?

It’s common for businesses to spend money on entertaining customers as a way of showing appreciation for their custom and encouraging loyalty. However, deciphering whether client entertainment expenses are non-deductible, 50% tax deductible or 100% tax deductible in line with the IRD’s rules can be a real challenge. From the IRD’s perspective, the types of

2019-08-01T10:52:16+12:00August 1st, 2019|Tax|

GST: The Second-hand Goods Credit

A GST-registered person who purchases “second-hand goods” in the course of a taxable activity may be able to deduct a proportion of the purchase price as input tax. A deduction may only be made if: The goods are purchased for making taxable supplies; The goods are in New Zealand; The supply is a non-taxable supply,

2019-07-02T16:08:25+12:00July 2nd, 2019|Tax|

Non-Deductible Expenses

While many expenses incurred in the course of doing business can be claimed to reduce your income tax, certain expenses are not deductible for tax purposes. These include: Late filing and late payment penalties imposed by the IRD. Costs related to breaking the law, such as speeding tickets or parking fines. Insurance premiums relating to

2019-07-02T10:05:40+12:00July 2nd, 2019|Tax|

Is Sponsorship Tax Deductible?

If your business provides sponsorship to an individual or organisation, it may be tax deductible. Sponsorship is different to ‘advertising’ or ‘donations’. It is defined as when the taxpayer incurring the expenditure expects that his/her business will be promoted in some way, whilst the sponsorship recipient will also be benefited in some way. The IRD’s

2021-07-12T13:02:04+12:00June 24th, 2019|Tax|

Paying Tax on Multiple Jobs

Workers all around the world are increasingly favouring short-term jobs, or gigs, in place of more traditional permanent roles. Gig workers who take casual short-term jobs fall into the same category as contractors, free-lancers and self-employed people who must account for their own tax on every job they take. For tax purposes, the same rules

2021-07-12T12:57:56+12:00May 30th, 2019|Tax|

Holiday Home And Short-Term Rental Taxes

Renting out your home, rental property or holiday home for a short-term period can be a great way to make some extra income when you’re not personally using those properties but don’t want to lock in long-term renters. Airbnb, Bookabach and other online accommodation companies make it extremely easy to list your property as they

2021-07-12T12:51:15+12:00May 6th, 2019|Property Accounting, Tax|

Are You Running A Hobby Or Business?

Do you sell pot plants or homemade jam to friends or at your local weekend market? While this may be just a hobby to you, in the eyes of IRD it could be classed as a business and therefore is eligible to be taxed. Regular sales – however small they may be – can mean

2019-03-06T08:57:52+12:00March 6th, 2019|Tax|

Is Income Protection Insurance Tax Deductible?

The short answer is yes, provided the benefit from the insurance policy is taxable. The real question to ask is: is your income protection insurance taxable? Indemnity or Loss of Earnings Insurance A claim made against an Indemnity or Loss of Earnings policy relates directly to the loss of income and the pay-out is based

2018-06-28T11:16:08+12:00June 28th, 2018|Tax|

What Is Fringe Benefit Tax (FBT)?

Fringe Benefit Tax (FBT) affects many SME owners and yet can be difficult to understand and calculate correctly. In this article we explain exactly what FBT is and how it works. What Is A Fringe Benefit And Why The Tax? A fringe benefit arises when an employer provides a non-cash benefit to an employee, including

2022-08-29T10:26:55+12:00June 18th, 2018|Tax|

GST Registration: Understanding the Basics

Most goods and services in New Zealand are subject to GST at the rate of 15%. We clarify the general rules for New Zealand businesses regarding who must register for GST, and explain the different accounting and filing methods. GST Registration You can voluntarily register for GST if you are in business. It is compulsory

2017-12-20T12:22:17+12:00June 19th, 2017|Tax|

Right First Time: Entertainment Expenses

Taking the guesswork out of common SME topics so you can get it “right first time”. In this article we look at the rules regarding entertainment expenses.  There is often confusion around which expenses can be claimed under ‘Entertainment’ and what is the tax deductibility criterion. Certain entertainment expenses are 100% deductible, while some are

2020-12-18T15:14:10+12:00May 10th, 2017|Tax|